Elliott Wave theory - why does it work?

[kkseal]

big peopl's and fund/fii activity forms ur technical analysis patterns,they don't follow that.

Aren't 'positions' also mainly on account of them?

Nonetheless, an excellent post.

Regards,
Kalyan.

 

[elliottwaveanalyst]

Hi,

Just a note about Elliott Wave Theory. Though it appears to be bound by rules and guidelines, I can vouch that it is pretty much subjective. Have been using this theory for quite many years now, but still am amazed at the possibilities it throws up. Therein lies the skill of the analyst - which of the possibilities one needs to consider and which to discard.

To make things more clear, the game of chess is a very good example of this. Even in chess, there are rules, simple rules really like in Elliott Wave Theory. But the possibilities are immense. Imagine that you are playing a chess game with the market as the opponent. EW theory says that the market can make its move in a variety of ways, but it does so within a given set of rules. A good player can anticipate what the opponent is up to. Similarly, a good analyst should anticipate what the market is up to!

Vinod Krishna Bhat.
http://www.elliottwaveanalyst.com

 

[amitt29]

bv praveen and amit 29,i can only say,what ur talking is pure technicals and i wasn't here in jan but am there on orkut in 2-3 communities,anyhow beyond this.i don't still agree with much of ur elliot waves coz when reversal happens,elliot takes too much time to spot it and oppurtunity is lost and you also can get stucked by seeing the pattern formation.

beyond all this,one fact remains,all these technicals change within few days,if u can't read positions in the market,pure technical analysis won't do much.
pick up the best traders in the world,i am using the word traders and not investors here.they are more interested in things like sentiments,positions ,near term fundamnetals,global sentiments and trading pshychology.
big peopl's and fund/fii activity forms ur technical analysis patterns,they don't follow that.

see ur technical analyst coming to television.like prakash gaba,ashwani gujral,etc.etc.
go and find what wealth they have created and u will get ashamed if anyone of you is following them.

Point by point,

First of all get the spelling of Elliott right,
What u spotted and told in Jan, i wrote to one of the best Elliottician in December,regarding market topping out.

EW spots turns b4 that happens,for reference read my useful tools thread(from the beginning),ask any of the old members here(members who joined 2 yrs back).So ur contention that EW spots trend change later,stands at fault.

I used the word "understanding"for the theory.And explained to BVP where the understanding stands to fault(in extensions and in irregular)there also there are tools to confirm.

I dont know who is the best trader one who wins most of the time or one who makes huge profits.


Besides the f2,f1 f3 whatever their positions etc also form technicals,which is used as reference and wrt(that is with respect to prior trends)to determine the course of markets.

Ashwani Gujral,Prakash Gaba,with all due respect to them I am not a mudslinger on anyone and whatever they are doing its their profession and people's choice to watch them.You can choose not to watch.And who told you that I or for that matter any TA who is worth his salt watches and trades on their tips etc.(BTW tips are given after dinner).

Markets always move on technicals,it is the understanding of the technicals that makes the men out of boys.

I rest my case and may not be able to reply for a couple of days as i am back to my native place.

 

[swagat86]

Interesting thread. Lemme tell u Hitesh that i have no idea of who said markets gonna go up to 15000 or 16000. Whose bothered? any tom dick and harry can get a prediction ryt once or twice. But wen it come to trading only one thing matters how big ur bank a/c grows with time.


BTW way back in Dec and jan we(Amit, Joy da, Ajay , me and several others) already had dicussed in traderji chat room about market topping out. So if the honourable Mr Finance Minister comes and tell me markets gonna go up il not accept it.


Thanks

 

[bvpraveen]

Hi all,

If you try to predict the next pattern = failure most of the time

...

Hello Winston,

As we all know, the impulse waves are usually well delineated. They are easier to deal with than the more complex corrective waves.

The innumerable corrective wave possibilities, I feel, makes EW complex to understand and apply, for most of the people. I feel this complexity and its inherent flexibility gives an edge to EW. Else everyone can apply EW easily, making it inefficient.

After the end of a move, we are left with probable patterns. As quoted else where in the net, as seems quoted in Sherlock Holmes, if we remove the impossible ones, whatever left, how ever improbable, should be the truth. So one may try to predict the next move, and may change our interpretation as market gives further information.

Just my two cents.

Praveen.

 

[bvpraveen]

Hi,

....

To make things more clear, the game of chess is a very good example of this. Even in chess, there are rules, simple rules really like in Elliott Wave Theory. But the possibilities are immense. Imagine that you are playing a chess game with the market as the opponent. EW theory says that the market can make its move in a variety of ways, but it does so within a given set of rules. A good player can anticipate what the opponent is up to. Similarly, a good analyst should anticipate what the market is up to!

Vinod Krishna Bhat.
http://www.elliottwaveanalyst.com

Nice Vinod.

Praveen.

 

[marcus]

Hi,

Just a note about Elliott Wave Theory. Though it appears to be bound by rules and guidelines, I can vouch that it is pretty much subjective. Have been using this theory for quite many years now, but still am amazed at the possibilities it throws up. Therein lies the skill of the analyst - which of the possibilities one needs to consider and which to discard.

To make things more clear, the game of chess is a very good example of this. Even in chess, there are rules, simple rules really like in Elliott Wave Theory. But the possibilities are immense. Imagine that you are playing a chess game with the market as the opponent. EW theory says that the market can make its move in a variety of ways, but it does so within a given set of rules. A good player can anticipate what the opponent is up to. Similarly, a good analyst should anticipate what the market is up to!

Vinod Krishna Bhat.
http://www.elliottwaveanalyst.com

Dear Mr. Bhat,

Thanks for a great explanation on the possiblities on the EW theory, like a game of chess .......... hmmm fascinating ......truly fascinating.......

By the way could you tell us why you're advertising your services, the reason I ask this is just like the game of chess and stuff (great example by the way) , as you're selling your services for a fee you sure must be good at it, I mean you must play the game very well in order to advise others for a fee.

Wouldn't it just be better if you used your expertise to make a fortune yourself?

Or have you already made your fortune and now want to help others do the same for a fee, in which case I must say you're a very benevolent person.

Please consider this a compliment.

 

[elliottwaveanalyst]

Hi Marcus,

Thanks for the same.

Yes, I am indeed in the business of providing advisory services using Elliott Wave Theory.

To be frank, I would not say that I have made a big fortune using this theory. I have been successful to the extent that I avoid big losses, while hanging on to profits. In fact, this is the theory I preach to my subscribers - to have a good amount of patience and take up trades only that match certain criteria.
And I usually trade all my calls which I classify as Low/Medium Risk and make profits/losses just like my clients do.

Dont want to sound this as an advertisement, but you can check out my performance at http://www.elliottwaveanalyst.com/performance.php
Like you can see, it is nothing spectacular or out of the world, but steady. I am personally pretty proud that my clients should have managed to come out of the huge volatility over the past two months unscathed.

 

[Spiderman]

hi vinod,
Elliott is not about avoiding big losses. that can be done with any other good money management method.The main ojective of elliott is finding suitable lows for buying and highs for selling so that you could catch the entry and exits early. If this is your purpose of using elliott then I am sorry you are doing something very strange.

 

[elliottwaveanalyst]

I use EWT to help in money management also, which incidentally, most people dont realise the importance of. EWT allows you to set objective stop losses, rather than subjective ones, which in my opinion is a great asset to have.